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According to Freddie Mac’s survey last week, the average rate for a 30-year fixed mortgage was 5.48%. This is one of the lowest rates since 2004. Furthermore the Fed has cut rates by 1.25 percentage points in eight days, and has lowered the target for the federal funds rate to 3%. It is possible that the mortgage rates will come down more. The federal funds rate is the interest rate that the Fed or other banks charge for overnight lending to another bank.
Fixed-interest mortgage rates are set by markets and are based on long-term money rates and not short term rates and a 1.25% cut in the Fed rate does not necessarily lower fixed mortgage rates by 1.25%. However, lowering Fed rates can certainly have some effect on the mortgage rates. When the Fed rate drops, it lowers 30-year Treasury Bonds yield and the LIBOR rate. These are two of several benchmarks that are used to set mortgage rates. Also, when the funds rate is low, banks can charge lower interest on their loans and still make a profit. Even if they loan out most of their own funds and then have to borrow to meet the Fed’s reserve requirements.
The Fed rate cut tends to have a more pronounced effect on those adjustable rate mortgages or home equity lines with Interest rates that are tied to short-term rates. Those Las Vegas home owners whose adjustable rate mortgage resets henceforth, should see a much lower increase in their monthly mortgage payments now. I certainly hope that this helps stressed home owners to hang on to their home.

Relevant web-site pages Las Vegas Economic News, Las Vegas, Nevada Residential Real Estate News, Las Vegas, Nevada Commercial Real Estate News.